The LUNA binary options strategy combines several elements at once: highlighting Japanese candlesticks in the direction of the trend and an entry point indicated by a special mark on the chart. Together, they form a complete trading system that helps make decisions without unnecessary guesswork - the built-in indicator is responsible for determining the trend.
But how to make this strategy even more effective – we will tell you in this review. Find out how one simple but important element can significantly improve the quality of signals.
Content:
- Characteristics
- Installation
- Overview and settings
- Trading Rules for LUNA
- Specifics of application
- Conclusion
- Download LUNA
Characteristics of the LUNA Binary Options Strategy
- Terminal: MetaTrader 4
- Timeframe: M5
- Expiration: 3 candles
- Option Types: Call/Put
- Built-in indicators: LunaM3.ex4
- Trading instruments: currency pairs , commodities, cryptocurrencies , stocks
- Trading hours: 8:00 - 20:00 (GMT+2)
- Recommended brokers: Quotex , Pocket Option , Alpari , Binarium
Setting Up a Strategy for Binary Options LUNA
The LUNA strategy indicators are installed in MetaTrader 4 in a standard way. First, open the terminal and select "File" → "Open data directory" in the top menu. In the window that appears, go to the MQL4 → Indicators folder and copy all the indicator files there.
If the package contains templates, they need to be moved to the templates folder in the root directory of the terminal.
After that, restart the platform so that the new indicators and templates appear in the list. You can watch more detailed instructions in our video:
Review and Settings of the Strategy for Binary Options LUNA
The LUNA binary options strategy is built on a custom indicator that helps to accurately determine whether the market is in a bullish or bearish phase . The system's main indicator automatically analyzes the price and colors the candles on the chart: green is a signal of buyer dominance, red is a sign of seller dominance. This visual approach simplifies reading the trend and speeds up decision making.
This alone makes the LUNA strategy worth considering. It is not without reason that experienced traders believe that the ability to determine the direction of a trend is one of the key skills that every beginner should start with. It is this that lays the foundation for stable and confident trading in the future.
In addition to determining the trend, the LunaM3 indicator also tells the trader the best moments to enter the market – the signals are displayed on the chart in the form of a diamond. It is important to note that each such signal is strictly in line with the market movement. In other words, the LUNA strategy works in accordance with the trend, which significantly increases the reliability and accuracy of transactions.
Now a little about the strategy settings. There are almost none here. The developer deliberately hid from the user the parameters by which the system determines the trend and generates signals. All that is available is the setting of candle colors, signal diamonds and sound alerts.
Frankly, this is not enough. Each asset and timeframe has its own characteristics that could be taken into account with a more flexible setup. Since LUNA does not provide such a possibility, we added an additional indicator to the system - it helps filter false signals and makes trading noticeably more reliable.
In addition, the effectiveness of the strategy can be enhanced by using candlestick models and chart patterns. Read more about this in our selection of articles:
- Candlestick analysis and binary options.
- Japanese Candlesticks for Beginners and How to Read Them.
- Japanese candlesticks – graphical analysis.
- Using Pin Bars in Binary Options Trading.
Trading Rules for LUNA
Let's figure out how to significantly improve the accuracy of LUNA strategy signals. Let's start with the main thing - most false entries appear during weak price momentum and periods of low market activity, especially during the Asian session. This is a time when there is practically no movement in the market, and signals lose their reliability.
Our article “ The Best Time to Trade Binary Options ” will help you avoid trading during “empty hours.” It provides a detailed breakdown of the working hours of global trading platforms and their impact on market activity.
As for filtering the signals themselves, the Relative Strength Index (RSI) indicator has proven itself to be excellent here. It measures the strength of the current price impulse and helps traders understand who is currently in control of the market – buyers or sellers. If the RSI line is confidently above level 50, the bulls prevail. If it goes below this mark, the bears have seized the initiative.
It is this position of the RSI relative to the middle line that we propose to use as a filter. However, it is important to understand that level 50 is an average value. It is better to select individual threshold levels for each asset.
In our testing, for example, levels 55 and 45 showed good results. We opened Call trades only when the LUNA strategy signal coincided with the RSI above 55, and Put options – when the indicator value dropped below 45.
This approach helped to filter out weak signals and allowed us to focus on really strong entry points.
Opening a Call Option
- We make sure that the trend is upward – the candles are green.
- A green diamond appeared under the candle.
- RSI is above 55.
- At the opening of the next candle we buy Call.
Opening a Put Option
- We are convinced that the trend is downward – the candles are red.
- A yellow diamond appeared above the candle.
- RSI below 45.
- At the opening of the next candle we buy Put.
We recommend setting the expiration time equal to three candles. However, the optimal period for holding positions depends on the specific asset and should be selected by you based on the results of testing on historical data. This approach will help to adapt the strategy to the features of the selected instrument and increase its effectiveness.
Specifics of Using the LUNA Binary Options Strategy
Experience shows that the best results for the LUNA strategy are achieved during active financial market hours. This is when confident price impulses are formed, at which the strategy reveals its potential.
Also, do not get carried away with trading on lower timeframes . Their main drawback is market noise and a large number of false signals. Even despite the presence of an additional filter, it is important to avoid periods of flat and low volatility . The strategy is sensitive to the market phase, and in a sideways movement its signals lose accuracy.
Pros of the LUNA Strategy
Among the obvious advantages of this strategy, it is worth noting the presence of pop-up notifications, sound alerts and push signals - all this makes trading more convenient and timely. The built-in trend filter deserves special attention: the system generates signals strictly in the direction of the current market movement, which reduces the number of potentially unprofitable transactions.
Visual design in the form of colored bars significantly simplifies the analysis process, especially for those who are just beginning to get acquainted with the markets. And finally, an important plus - the strategy signals are not redrawn, which means that the trader always sees the real picture without unpleasant surprises.
Cons of the LUNA Strategy
The weak points of this strategy include the operation of the trend filter - it does not always react to significant corrections in time. Sometimes you can see how the chart forms red candles, but the price is steadily growing, or, conversely, green bars are accompanied by updating the minimums. This indicates a change in the market direction, which the system, unfortunately, ignores.
Another point is that the filtering of trading signals is not the most strict. As a result, traders often have to connect additional analysis tools to cut off potentially weak entry points and increase the overall reliability of the strategy.
Conclusion
The LUNA binary options strategy is based on a signal indicator with advanced capabilities. Thanks to the built-in trend filter, traders open trades only in the direction of the current market movement - this helps to increase the accuracy of entries and the overall percentage of successful trades.
In this review, we showed how you can strengthen the system by connecting the RSI indicator. Its addition allowed us to reduce the number of false signals and make trading more confident. Try experimenting with the parameters and levels of RSI - choose the settings that best suit your asset and timeframe.
We recommend that you first test the strategy on a demo account with the best brokers . And in real trading, be sure to follow the rules of risk management and money management . Happy trading!
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